Buggy AMD Catalyst drivers on Ubuntu with multi-monitor desktop

Having recently set up a multi-monitor configuration on Ubuntu 12.04 I've gone back to a single monitor. Specifically, I configured the system to run with multi-display desktop from display(s) selected in the Catalyst Display Manager application under Display Manager. The AMD drivers are just too buggy/flakey to live with in this mode.

The first problem I ran into is that application menus are broken. Menus can only be selected via the mouse about 5% of the time (the rest of the time the menu will display for a fraction of a second and the disappear.) Bringing up the menu via F10 works about 80-90% of the time.

Another problem is that desktop icons and application window locations have problems persisting. Sometimes desktop icons will shift right, other times left, other times off the screen entirely. Application window locations seem to be saved in the sense that they will consistently be restored to the wrong locations.

The final category of problems I've run into is harder to explain: general system weirdness and instability. Various issues that didn't exist previously started to appear... when multi-monitor desktop mode is turned off they disappear.

My system is hardly anything exotic or complicated: I'm using an AMD Radeon HD 6450 with proprietary drivers enabled (currently the driver version reported is 8.96.7-120312a-135598C-ATI) Currently I don't have any solutions to these issues other than to disable the multi-display desktop mode.

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